Brexit White Paper published
On July 12, the Government published a long-awaited White Paper on Brexit which set out proposals for the UK’s future relationship with the European Union.
Secretary of State for Exiting the European Union Dominic Raab made a statement to MPs in the House of Commons explaining the proposals.
Among the first responses, Institute of Directors director general Stephen Martin welcomed the additional detail but said that key areas were still missing from the paper:
“This White Paper puts some vital meat on the bones of the Chequers plan. More specifics on its proposed customs arrangements, and its proposed free trade area in goods with the EU will be welcomed by business leaders who have delayed Brexit preparations because of a lack of detail on the future partnership. It should also give EU negotiators less scope to claim that they cannot push ahead because there is no plan from the UK. We look forward to comprehensive engagement with the Government on turning these ideas into practical realities that work for firms engaged in international trade.
“However, the Government has missed a trick by holding back on detail in several areas. Clarity about its approach to VAT arrangements, which are crucial to achieving its aim of frictionless trade with the EU, is in short supply. The paper also implies that businesses and individuals won’t have access to any new dispute resolution mechanism relating to enforcement of the agreement. Given the unprecedentedly close economic arrangement the UK is hoping for with the EU as a third country, this should be in there. The Government has provided more clarity on its approach to financial services, and we look forward to them doing the same for the rest of the services sector.
“But the biggest question mark looms over what will replace freedom of movement. The Government is right to prioritise an ambitious scheme on labour mobility with the EU, but businesses need to work from concrete proposals. We would urge the Government to bring forward its plans for post-Brexit migration, which should be at the heart of our future economic partnership with Europe.
“EU negotiators now have specific details to build upon, and we strongly urge them to respond constructively to the White Paper so that progress can be made for the benefit of both sides.”
While UK Finance chief executive Stephen Jones stressed the importance of an agreement over services:
“The UK is currently the second largest exporter of services worldwide. Tens of thousands of customers and billions of euros of banking and capital markets services are reliant on the UK remaining Europe’s most interconnected financial centre. As the Government recognises in today’s White Paper, it’s entirely possible to use the tools and trust we have established during 40 years of membership of the EU to construct a new arrangement that preserves some of the benefits of close alignment without sacrificing political and regulatory autonomy.
“However, as today’s paper makes clear, simply relying on existing equivalence arrangements will not provide financial institutions with effective market access that enables them to serve their customers. The Government is right to want to propose a new economic and regulatory arrangement which seeks to strengthen and expand the current third country regime.
“Given the limited time available it is vital that both the UK and EU27 negotiators come to the table and focus on ensuring a legally enforceable agreement, delivering enhanced and expanded third country arrangements that enables meaningful cross-border market access in financial services. In this way firms on both sides of the Channel can continue to serve business and clients across the UK and Europe without risking financial stability.”
Labour MP Hilary Benn, who chairs the Committee on Exiting the European Union, noted that time was running out to conclude negotiations:
“It is welcome that the Government has at last set out its proposals on the future UK-EU relationship in the face of economic reality.
Having taken so long to get to this point, however, we are desperately short of time to sort everything out and many questions remain unanswered.
On the plan for a Facilitated Customs Arrangement for goods and agri-food, the main questions are as follows: will the EU agree to it; how will it work in practice; how much bureaucracy for businesses will it involve; and can it be put in place in time for the end of the proposed transition period in December 2020. We have also yet to see a full proposal for a backstop arrangement to maintain a frictionless border between Northern Ireland and the Irish Republic.
Despite having a trade surplus with the EU in services — which make up nearly 80% of the UK’s economy — the Government admits that we will lose current levels of access to EU markets because it is not proposing to follow EU internal market rules. No case is made as to why this would be in the national economic interest. Nevertheless, the Government has said it wants an agreement with the EU on mutual recognition of professional qualifications and has finally set out proposals for financial services.
While committing to end free movement of people, the Government has said very little about what will replace it. Many witnesses from business and services have told us that free movement is the most important outstanding issue for them and we urgently need clarity from ministers on this.The White Paper’s commitment to continued participation in as many elements of foreign, security and defence policy co-operation as possible is welcome and very important for our future security.
The Association Agreement model and the paper’s proposed governance systems seem sensible. However, despite the White Paper’s circular language on the remit of the CJEU, it is clear that the CJEU will continue to have a very important say, if indirectly, in resolving any potential disputes about the proposed “common rulebook”.”
The Scottish Government’s Cabinet Secretary for External Affairs Fiona Hyslop suggested that the plans would harm Scotland’s economy:
“This paper, published more than two years after the Brexit referendum and only a few months from the end of the negotiating period, offers little reassurance for those worried about the impact that leaving the EU will have on our economy. Quite simply, these plans fall short and will harm our economy.
“As with the Chequers agreement, there is some evidence that the UK Government now realises the damage of leaving the EU, as well as the benefits that being in the EU, the Single Market and Custom Union has brought to the whole of the UK. Nevertheless, there is still a long way to go before those risks are mitigated.
“The Scottish Government has been consistently clear that the best way to protect Scotland’s interests and foster future growth — short of full EU membership which the people of Scotland voted for — is continued membership of the European Single Market and Customs Union.
“While the paper provides an indication that the UK wants to participate in pan-EU programmes in areas such as science and research, there continue to be too many unknowns on issues such as whether the UK’s proposals can deliver continued use of the European Arrest Warrant and what they mean for the future migration of people. The UK Government has fallen short on employment rights and environmental protections and, instead of committing to matching EU standards, they are only promising not to fall behind the current position.
“There is still an opportunity in these final few months of negotiations to encourage the UK to adopt the only sensible position of remaining within the Single Market and the Custom Union and to put a stop to some of the damage that Brexit will do. The Scottish Government will continue to make that case and to argue for much greater engagement with the UK Government to ensure Scotland’s interests are protected.”
While in Wales, Plaid Cymru MP Jonathan Edwards described the proposals as ‘fanciful and undeliverable’:
“The UK Government continues to propose to cherry pick certain aspects of EU membership in a way that the EU’s negotiators have made perfectly clear is unacceptable. For two years the EU has repeated that we cannot have our cake and eat it and it is deeply irresponsible for the UK Government to continue to ignore their warnings so close to the deadline.
“The longer the UK Government goes on deluding itself with these fanciful and undeliverable proposals, the more damage will be caused to our economy.
“The intergovernmental agreement signed by Westminster and the Labour Welsh Government was meant to result in decisions on Brexit being taken jointly by the respective governments. In publishing this White Paper without consulting the Welsh Government, Westminster is ripping up the agreement at the first opportunity. The Labour Welsh Government was clearly naïve to be so quick to trust Westminster.
“The UK Government needs to stop kidding itself and make its decision — will they put the economy above their own ideologies and thus commit to maintaining our membership of the Single Market and the Customs Union. That is the only way we can protect people’s jobs, wages and standard of living outside the EU.”
For the Local Government Association, which represents local authorities in England, Brexit Taskforce chair Cllr Kevin Bentley said that councils urgently needed detail on the new UK Shared Prosperity Fund:
“The publication of the White Paper gives us a clearer understanding of what the Government’s vision of post-Brexit Britain will look like. This includes the acknowledgement from the Government of the importance of replacing EU regional funding, currently worth £8.4 billion, with the UK Shared Prosperity Fund (USKPF), following extensive lobby by the LGA.
“Brexit cannot leave local areas facing huge financial uncertainty as a result of lost regional aid funding. This funding has been used by local areas to create jobs, support small and medium enterprises, deliver skills training, and invest in critical transport and digital infrastructure and boost inclusive growth across the country.
“To help ensure we have an economy fit for the future, we are urging the Government to act immediately to consult on the detail of what the fund will look like. Councils need to know quickly how they will be able to bid, receive guarantees that the UKSPF will at least match the funding from the current European Structural Fund and receive their funding allocations by the time we leave the EU.
“Without action there is a risk that billions of pounds of investment into our communities will be lost and local areas and economies will be denied desperately-needed funding.
“The White Paper also acknowledges the issue of EU nationals being able to apply to come and work in the UK. This is of particular importance to local government as, for example, 7 per cent of social care workers are non-UK EU nationals. The LGA is keen to work with the Government to ensure that these vital public servants can continue doing this vital work caring for the elderly and most vulnerable in our society.”
Professor Anand Menon, director of pro-European campaign group The UK in a Changing Europe, said that the proposals represented a ‘pinking’ of UK red lines:
“The Government’s white paper should be welcomed as a useful starting point in the process of agreeing a future relationship between the UK and EU.
“The white paper represents a slight pinking of the UK’s red lines to ensure the absence of a border on the island of Ireland — a welcome recognition of the urgency of that particular problem. But it is far from being a solution to the Irish question or the issue of the broader trading relationship.
“Whilst I would hope the EU welcomes this evolution in the British position, it is difficult to envisage the plan being accepted without further clarification and most probably further evolution on the British side. This is particularly so on issues such as a practical alternative to a customs union and the nature of governance structures to oversee the so-called ‘joint rule book’. Much remains to be done.”
While the group’s senior fellow Professor Jonathan Portes said the proposals would give the UK less influence and could result in a hit to the economy:
“These proposals would effectively keep us in the single market for goods and food products — except we’d have far less influence over the rules. On services, including financial services, the UK continues to ask for extensive market access on the basis of ‘equivalence’, but at the same time seeks regulatory autonomy.
“While these proposals have been presented as a softening of the government’s approach to Brexit, even on the most optimistic interpretation they would still, in practice, mean new and substantial non-tariff barriers to trade, particularly in services. The government’s own ‘Brexit economic impact assessments’ suggest that this would have a large and negative impact on the UK economy, perhaps in the region of three percent of GDP over 15 years.”
Portes also said on immigration:
“The white paper offers nothing substantively new on immigration and free movement. While a future trade agreement may cover mobility for business purposes, there is no commitment to a more generous regime for work or family visas than for non-EU countries, still less to a modified version of free movement.
“The rest of the EU is likely to see this as a missed opportunity, meaning one of three things is inevitable. Either the government will have to make a substantial further move on this. Alternatively, the EU27 will have to reverse their position that it is impossible to cherry-pick the ‘four freedoms’ of the single market. Or, finally, the broader white paper proposals will be largely dead on arrival.”
Lord Green of Deddington, chair of the Migration Watch UK campaign, detected ‘weasel words’ in the paper’s chapter on immigration:
“This immigration chapter is in many respects close to what we have suggested but there are some weasel words. It’s vital that the UK should not be drawn into a negotiation over numbers. Indeed, it is not enough to ‘control’ the number of migrant workers from the EU. These numbers must be significantly reduced.”
University bodies Universities UK International and MillionPlus welcomed the proposed UK participation in the Erasmus programme. UUK director Vivienne Stern said:
“It is encouraging to see that the importance of attracting world class researchers and international students has been acknowledged. We also welcome the UK’s proposed participation in Horizon Europe and the next Erasmus programme, which will benefit EU member states as well as the UK.
“We urge the government and the EU to engage and reach agreement on these matters as quickly as possible to provide the certainty that university students and staff need on opportunities to study abroad and collaborate in research.”
Dr Greg Walker, Chief Executive of MillionPlus, said:
“The labour mobility proposals in the White Paper indicate a clearer direction of travel from the government but reference to researcher mobility with the EU as ‘temporary’ and without any supporting detail will not reassure many. Maintaining the UK’s world class strengths in science and research will require a comprehensive and ongoing agreement concerning the mobility of academic and research staff.
“The UK’s proposed participation in the Erasmus+ programme, coupled with an underpinning mobility agreement for young people is to be welcomed, enabling UK and EU students continued access to the many benefits of this scheme.
“Other key concerns have gone unanswered in the White Paper, such as reciprocal agreement on university fees for EU students post-Brexit. This is a matter that should be a priority for the government, not an also-ran issue.
“With so much time already lost, it will be challenging for agreement to be reached on the final shape of Brexit in time for the European Council in October. Any delay beyond this would be deeply problematic and expose the UK to a greater risk of ‘crashing out’ of the EU in March 2019. Such an eventuality could bring hugely damaging consequences for UK universities, their staff and students.”
The GMB union was scathing of the way the paper was unveiled. General Secretary Tim Roache said:
“Shambolic scenes in the Commons reflect the general shambles the government is making of Brexit.
“Workers and employers still have zero clarity about what the practical impact of Brexit will be on jobs, regions and communities.
“Instead we have woolly words that will easily be unpicked — that’s probably why Ministers are refusing to give any detail. This White Paper poses more questions than it answers.
“The customs arrangements Ministers are proposing to put in place in a matter of months rely on technology that doesn’t exist. They are living in a fantasy land if they think this will keep trade afloat.
“All the while, Ministers remain dangerously preoccupied with internal squabbles. It’s not good enough.”
